Chairman of ZTE, Yin Yimin, apologized to staff and customers on Friday after the U.S. and the China reached a deal over the company’s violation of sanctions placed on Iran and North Korea.
“This issue reflects problems that exist with our firm’s compliance culture and at management level,” Yimin wrote in a memo, Reuters reported Friday.
Yimin added that the incident was caused by the mistakes of a few ZTE leaders and employees. (RELATED: US Reaches Deal With Troublesome Chinese Telecom Company ZTE)
ZTE agreed on Thursday to pay a $1 billion fine to the U.S. following a temporary ban in the U.S. The ban would’ve severely damaged the company’s future if it were kept in place since ZTE products include components produced by American companies like Qualcomm and Intel.
“The activation of the denial order has caused huge losses for the company. The firm has paid a disastrous price,” Yimin added.
The penalty placed on ZTE includes a mandatory board and management change within 30 days, a $1 billion fine, and put $400 million in escrow.
“I’m very, very happy with this arrangement,” U.S. Secretary of Commerce Wilbur Ross said, adding. “It is the strictest and largest fine that has ever been brought by the Commerce Department.”
“Paying the fine is no problem, the real difficulty lies ahead and getting future business, especially overseas. Market confidence is lost,” a ZTE employee said, according to Reuters.
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